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THIS DOCUMENT I S THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT

1(84) Klusiohs

COPY NO

6 5

CABINET

CONCLUSIONS o f a M e e t i n g o f t h e C a b i n e t

h e l d a t 10 Downing S t r e e t on

THURSDAY 12 JANUARY 1984

a t 10.30 am

P R E S E N T

The

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H o n e s

^Hon M a r g a r e t T h a t c h e r MP Prime M i n i s t e r

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i s c o u n t Whitelaw i d e n t of the Council



The Rt Hon Leon B r i t t a n QC MP

S e c r e t a r y o f S t a t e f o r t h e Home Department

R t H

°

n N i ggeell Lawson MP

of t h e Exchequer

The Rt Hon S i r K e i t h Joseph MP

S e c r e t a r y o f S t a t e f o r E d u c a t i o n and Science

'Cell

teller Rt 't

B

e

°n James P r i o r MP

of State f o r Northern

ar rv

Ireland

l

°n M i c h a e l H e s e l t i n e MP y of s t a t e f o r Defence

on George Younger MP

S e c ^ t ^ V o f State f o r Scotland

ttr

^ eta*,

N i c h o l a s Edwards MP

r y

Rt Hon P e t e r Walker MP

t a r y o f S t a t e f o r Energy

The R t ^ * ? P a t r i c k J e n k i n MP

S e c r e t a r ^ ^ ) State f o r t h e Environment

o f S t a t e f o r Wales

he

Rt

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B i f f en MP

Seal

The Rt Hon<^orman Fowler MP

S e c r e t a r y o£> S t a t e f o r S o c i a l S e r v i c e s

Lord C o c k f i e l d o f t h e Duchy o f L a n c a s t e r

The Rt Hon Tom K i n

Secretary of Stat

n J o h r i

t l v

r

hi J°n

M i c h a e l J o p l i n g MP °f A g r i c u l t u r e , F i s h e r i e s and Food

Ste

The Rt Hon P e t e r Re

Chief Secretary, Tr

The Rt Hon N i c h o l a s R i d l e y MP

Secretary of State f o r Transport

THE FOLLOWING WERE ALSO PRESENT

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li

r a m e ° ? h a m MP a r y Secretary, Treasury J o h n

W a k e

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4



Mr Malcolm R i f k i n d MP M i n i s t e r o f S t a t e , F o r e i g n and

Commonwealth O f f i c e

Mr John Gummer MP

M i n i s t e r o f S t a t e , Department o f Employment

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SECRETARIAT

S i r Robert A r m s t r o n g

Mr A D S G o o d a l l ( I t e m s 2-5)

Mr D F W i l l i a m s o n ( I t e m s 2 and 3)

Mr C J S B r e a r l e y ( I t e m 1 )

Mr R Watson ( I t e m 1)

C O N T E N T S

Subject

1. IRS

PARLIAMENTA Housing

Rates B i l l

2.

FOREIGN AFFAIRS

M i d d l e East

Nigeria

Southern

Africa

3.

COMMUNITY AFFAIRS

Community Budget and U n i t e d K"

Agriculture

4.

Is.

NORTHERN IRELAND

ECONOMIC AFFAIRS

i i

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I

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1. The C a b i n e t were i n f o r m e d o f t h e b u s i n e s s House o f Commons d u r i n g t h e f o l l o w i n g week.

t o be t a k e n i n t h e

THE PRIME MINISTER s a i d t h a t t h e debate on h o u s i n g b e n e f i t on t h e

p o s i t i o n ' s Supply day on 19 January w o u l d g i v e f u r t h e r o p p o r t u n i t i e s

c r i t i c i s m o f the Government's planned r e d u c t i o n s i n t h i s a r e a ,

e n t l y £3.4 b i l l i o n was b e i n g spent and one i n t h r e e households

d t h e b e n e f i t . She u n d e r s t o o d t h a t some o f t h e s e had above incomes. T h i s l e v e l o f e x p e n d i t u r e was u n a c c e p t a b l y h i g h , t r e s u l t e d i n p a r t f r o m a h i g h e r r a t e o f take-up f o l l o w i n g a n i s a t i o n o f t h e b e n e f i t arrangements and f r o m i n c r e a s e s ouse r e n t s and r a t e s . She was most concerned t h a t t h e be p r e s e n t e d c l e a r l y and t h a t t h o s e s e c t i o n s o f t h e h argued f o r c u t s i n p u b l i c e x p e n d i t u r e i n g e n e r a l , b u t a g a i n s t tWe 5 p e r cent c u t i n h o u s i n g b e n e f i t , s h o u l d be b r o u g h t t o r e a l i s e what l a r g e sums were i n v o l v e d . T h i s was o n l y . o n e f e a t u r e , but a s i g n i f ican-t—f e a t u r e , of the problem o f ' c o n t a i n i n g w e l f a r e expenditure whi^h g e n e r a l t o Western European c o u n t r i e s . T h i s p r o b l e m had been w e l l ^ d i s c u s s e d • i n a r e c e n t r e p o r t b y t h e O r g a n i s a t i o n pn and Development, w h i c h c o u l d be quoted i n f o r Economic Co-o 's campaign t o promote p u b l i c d i s c u s s i o n s u p p o r t o f t h e Go 1 w i t h t h e r i s i n g l e v e l of s o c i a l w e l f a r e of t h e i s s u e o f how s e f u l t o c o - o r d i n a t e a campaign o f expenditure. I t mi o u s i n g b e n e f i t on t h e l i n e s o f what had speeches by M i n i s t e r s ' .Rates B i l l . s u c c e s s f u l l y been done o

Bill

0 N M E N T

THE SECRETARY OF STATE FOR T H E c ^ ^ s a i d t h a t he was g r a t e f u l f o r t h e c o n t r i b u t i o n c o l l e a g u e s (4^au^ade by t h e i r speeches. He w o u l d be c i r c u l a t i n g updated b r i e f i n g t b ^ r ^ y . Statements i n s u p p o r t o f the Government's a c t i o n would s h o r t l ^ / f S e ^ f o r t h c o m i n g f r o m a number of b o d i e s r e p r e s e n t i n g t r a d e and i n c The

C a b i n e t -

Took n o t e .

di e

Ea st

s ons

< ; »

2. THE MINISTER OF STATE, FOREIGN AND COMMONWI (MR RIFKIND), s a i d t h a t t h e F o r e i g n and Commonwe^ a t p r e s e n t i n t h e M i d d l e East. He had v i s i t e d Egy£ 10 January and Saudi A r a b i a f r o m 10 t o 11 J a n u a r y , a^; s e e i n g P r e s i d e n t Assad o f S y r i a i n Damascus t h a t day. and Jedda he had encountered s t r o n g c r i t i c i s m o f t h e St} C o - o p e r a t i o n Agreement between t h e U n i t e d S t a t e s and Isri speech t h e p r e v i o u s day r e s t a t i n g t h e Government's p o s i t i c M i d d l e East c o n f l i c t i n s t a n d a r d terms had r e c e i v e d w i d e s p i publicity. I n J o r d a n , P a r l i a m e n t had been r e c a l l e d a f t e r a p e r i o d o f abeyance i n an a t t e m p t by K i n g H u s s e i n t o r e g a i n t h e i n i t i a t i v e i n t h e peace process and p u t p r e s s u r e on Mr Yasser Ar^_ the l e a d e r o f t h e P a l e s t i n e L i b e r a t i o n O r g a n i s a t i o n , t o go t o Ammanx^/

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K i n g H u s s e i n h i m s e l f had been a d m i t t e d t o h o s p i t a l and was l i k e l y

t o be o u t o f a c t i o n f o r some days. I n t h e Lebanon, P r e s i d e n t Gemayel's

new S e c u r i t y P l a n , w h i c h would a l l o w deployment by Lebanese Government

f o r c e s o u t s i d e B e i r u t , had s u f f e r e d a s e t b a c k and i t s i m p l e m e n t a t i o n

was u n c e r t a i n . The F o r e i g n and Commonwealth O f f i c e was i n t o u c h

w i t h t h e o t h e r c o n t r i b u t o r s t o t h e m u l t i n a t i o n a l f o r c e (MNF) about

t i o n s f o r widening t h e involvement o f t h e United Nations i n t h e

anon; and t h e i s s u e s would be c o n s i d e r e d by t h e F o r e i g n M i n i s t e r s

t h e f o u r MNF c o n t r i b u t o r s i n t h e m a r g i n s o f t h e European

ament Conference i n Stockholm on 16 J a n u a r y . There had been

gaap^keant r e d u c t i o n s i n b o t h t h e I t a l i a n and F r e n c h c o n t i n g e n t s

toMfhe^ENF, b u t t h e Lebanese Government wanted i t t o r e m a i n , and t h e

Saudd^OtaS made i t c l e a r t h a t t h i s was t h e i r w i s h t o o .

THE PRitfE/MT-NISTER, summing up t h e d i s c u s s i o n , n o t e d t h a t t h e

A m e r i c a n v c o n t i n g e n t t o t h e MNF had now w i t h d r a w n w i t h i n i t s base and

t h e r e was no a c t i v i t y on t h e p a r t o f t h e French. The B r i t i s h

c o n t i g e n t c o n t i n u e d t o c a r r y o u t i t s p r e s c r i b e d t a s k s and t o a t t r a c t

w i d e s p r e a d admLr^&Lon and r e s p e c t . I t must c o n t i n u e t o be t h e

Government's obnecyive t o have t h e MNF r e p l a c e d b y a U n i t e d N a t i o n s

f o r c e . B u t , srfteV^t&e S e c r e t a r y General o f t h e U n i t e d N a t i o n s c o u l d

n o t t a k e a c t i o n rid^J^His. end w i t h o u t a r e q u e s t f r o m t h e h o s t c o u n t r y

as w e l l as an a p p r o p r i a t e S e c u r i t y C o u n c i l R e s o l u t i o n , agreement

must f i r s t be r e a c h e d / « m e e n t h e f o u r c o n t r i b u t i n g Governments w h i c h

c o u l d t h e n be f ollowen^a^Nb c o n c e r t e d demarche t o P r e s i d e n t Gemayel.

Hi§eri

a

COMMONWEALTH OFFICE, s a i d t h a t

THE MINISTER OF STATE, FORE N i g e r i a had been staged b y

t h e r e c e n t m i l i t a r y coup d'e" senior o f f i c e r s apparently t o t a c t i o n by more r a d i c a l j u n i o r

r a n k s . The c o n s t i t u t i o n had be ended and p o l i t i c a l p a r t i e s

had been banned. Former P r e s i d e n a r i and some o f h i s c o l l e a g u e s

were i n d e t e n t i o n b u t were apparen ^ng w e l l t r e a t e d . The new

N i g e r i a n Government was emphasising nuity ofpolicy especially

i n t h e economic f i e l d , and t a l k s w i t h n t e r n a t i o n a l Monetary Fund

on r e s c h e d u l i n g N i g e r i a ' s debts were t&Xr.esume. The new Government

had s e n t a d e l e g a t i o n t o a number o f c a p i t a l s , i n c l u d i n g London where

i t was expected t h e f o l l o w i n g day. The B r i t i s h High Commissioner

m Lagos had been i n s t r u c t e d t o have normal wo contacts w i t h

the new r e g i m e . No o f f i c i a l B r i t i s h comment coup had been

v o l u n t e e r e d , b u t i f asked spokesmen would exp British

Government's d i s a p p o i n t m e n t a t t h e o v e r t h r o w o f ocratically

e l e c t e d c i v i l i a n regime. I t appeared t h a t a l t h o sident Shagari

general

had had genuine m a j o r i t y s u p p o r t i n l a s t y e a r ' s N i e l e c t i o n , t h e r e had been l i t t l e enthusiasm w i t h i n N i or h i s

i v e as

Government, w h i c h had been i n c r e a s i n g l y r e g a r d e d as w e l l as c o r r u p t . The i n d i c a t i o n s were t h a t t h e change ime

had been accepted by most o f t h e p o p u l a t i o n w i t h r e l i e f

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THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE, s a i d t h a t

t h e l a s t few weeks had seen m a j o r m i l i t a r y and d i p l o m a t i c developments

i n S o u t h e r n A f r i c a . A major South A f r i c a n o f f e n s i v e i n t o S o u t h e r n

Angola - t h e l a r g e s t s i n c e 1976 - had been mounted t o pre-empt t h e

annual i n f i l t r a t i o n i n t o Namibia by t h e South West A f r i c a n People's

O r g a n i s a t i o n and t o d e s t r o y a S o v i e t s u p p l i e d m i s s i l e base.

h a v i n g a c h i e v e d t h e i r o b j e c t i v e s , t h e South A f r i c a n f o r c e s were now

bi^Lng w i t h d r a w n . Meanwhile t h e U n i t e d N a t i o n s S e c u r i t y C o u n c i l had

•£J»opted two R e s o l u t i o n s s t r o n g l y condemning South A f r i c a . The U/Wp^d Kingdom had s u p p o r t e d t h e f i r s t R e s o l u t i o n , w h i c h c a l l e d f o r t h e w f t h d ^ A ^ a l o f South A f r i c a n f o r c e s f r o m A n g o l a , b u t had a b s t a i n e d ( t 6 % e t K e V w i t h t h e U n i t e d S t a t e s ) on t h e second because i t came c l o s e t o c^&>*iJk f ° economic s a n c t i o n s a g a i n s t South A f r i c a and appeared t o encbireage m i l i t a r y s u p p o r t f o r Angola f r o m Cuba and t h e S o v i e t U n i o n . P r o s p e c N L g / f o r p r o g r e s s now c e n t r e d on t h e South A f r i c a n Government's o f f e r toMdisengage f r o m Angola f r o m 31 January 1984 and t o o b s e r v e an e x t e n d a b l e t r u c e ; and on t h e r e s u m p t i o n o f c o n t a c t between A n g o l a and t h e U n i t e d S t a t e s , w h i c h would s t a r t w i t h a w o r k i n g m e e t i n g between t h e two s i d e s yfP^&ve Verde t h e f o l l o w i n g week a t w h i c h a l l r e l e v a n t i s s u e s were to(£e
The

Cabinet

Took n o t e .



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U s

io

n s

3. THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (MR RIFKIND),

r e p o r t e d t h a t , c o n t r a r y t o some press r e p o r t s , t h e m e e t i n g on

6~7 J a n u a r y between t h e F o r e i g n and Commonwealth S e c r e t a r y and t h e

P r e s i d e n t o f t h e European Commission, Monsieur T h o r n , had been u s e f u l ,

o n s i e u r Thorn had been concerned t h a t t h e French P r e s i d e n c y m i g h t see

e European C o u n c i l i n March o n l y as a s t a g i n g p o s t t o a l a t e r

lement and had been s t r e s s i n g t o French M i n i s t e r s t h a t d e c i s i o n s ,

l e a s t s i g n i f i c a n t p r o g r e s s , were needed i n March. I t appeared t h a t

ench were s u g g e s t i n g i n c o n t a c t s w i t h t h e Commission and o t h e r

t a t e s t h a t t h e U n i t e d Kingdom would be ready t o a c c e p t a t i m e ­ d d e g r e s s i v e s o l u t i o n t o t h e p r o b l e m o f b u d g e t i n e q u i t y . The

Cf a*pd Commonwealth S e c r e t a r y had made c l e a r once a g a i n t h a t t h e r e

was n o ^ j ^ ^ i ^ K f o r t h i s s u g g e s t i o n , which was n o t a c c e p t a b l e . On t h e dispute^-\SMount o f t h e r i s k - s h a r i n g element o f t h e U n i t e d Kingdom's 1982 r e f u n d s , ^me^Foreign and Commonwealth S e c r e t a r y had now w r i t t e n f o r m a l l y t o t h e Comn&ssion. Monsieur Thorn had n o t been c o m p l e t e l y n e g a t i v e , and had expressed r e a d i n e s s t o a c t as an "honest b r o k e r " on t h i s m a t t e r . I t was suggested t h a t t h i s m i g h t be because t h e U n i t e d Kingdom had e x p r e s s e d t h e f i r m v i e w that>^the Community was now i n d e f a u l t on t h i s payment, a l t h o u g h i t was j / c i n ^ d o u t t h a t o t h e r member s t a t e s d i d n o t a c c e p t t h a t t h e y were i n d e f a i

THE MINISTER OF AGRICUL' ISHERIES AND FOOD r e p o r t e d t h a t , a t t h e

C o u n c i l o f M i n i s t e r s (Agric? ) on 9-10 J a n u a r y , t h e r e had been g e n e r a l

agreement w i t h t h e French ncy t h a t t h e a g r i c u l t u r a l i s s u e s r a i s e d

a s t summer, w h i c h had been d i s c u s s e d

i n t h e Commission's proposa I s l e a d i n g up t o t h e European C o u n c i l

u n s u c c e s s f u l l y i n t h e Specia rward i n t h e A g r i c u l t u r e C o u n c i l ,

i n December, s h o u l d now be c a r i c u l t u r a l spending w o u l d c o n t i n u e t o

The s t r i c t f i n a n c i a l g u i d e l i n e u d g e t a r y q u e s t i o n s . The

be t r e a t e d w i t h t h e o t h e r f i n a n c i v e r t h e Commission's p r o p o s a l s

a g r i c u l t u r a l work programme would a ere expected t o be p r e s e n t e d

on a g r i c u l t u r a l p r i c e s f o r 1984-85, ^^4> probably c o n t a i n i n g mainly t h e f o l l o w i n g week and would be r e s t r ^ o f Ministers (Agriculture)

f r e e z e s on f a r m s u p p o r t p r i c e s . The Co r i c ultural structure. These

had a l s o d i s c u s s e d Community measures on measures had e x p i r e d , and t h e C o u n c i l d i d ^ o t r e a c h agreement e i t h e r on

new measures o r on a r o l l - o v e r . Since t h e schemes were no l o n g e r i n

e x i s t e n c e , t h e r e would be no payments t o f a r m e r s i n t h e immediate f u t u r e

o f these s t r u c t u r a l a i d s , i n c l u d i n g c a p i t a l grai/fXs?ipd some a i d s i n l e s s

favoured areas.

The M i n i s t e r o f A g r i c u l t u r e , F i s h e r i e s and Food a l r t e d t h a t two U n i t e d Kingdom l o r r i e s c a r r y i n g lamb ( i n c l u d i n g a co n t o f New Zealand lamb) had been stopped by French f a r m e r s , who en some o f t h e lamb and d i s t r i b u t e d i t t o h o s p i t a l s and o t h e r ch o r g a n i s a t i o n s , and a p p a r e n t l y i n t e n d e d t o make t h e B r i t i s ers take t h e i r l o r r i e s t o P a r i s as p a r t o f a d e m o n s t r a t i o n . Simila" e n t s had t a k e n p l a c e r e c e n t l y a g a i n s t Dutch and D a n i s h l o r r i e s i n F r The U n i t e d Kingdom had i m m e d i a t e l y made r e p r e s e n t a t i o n s t o t h e F a u t h o r i t i e s . He had h i m s e l f spoken t o t h e French M i n i s t e r o f A g r i c u l t u r e , Monsieur Rocard, who had a p o l o g i s e d and g i v e n an as t h a t i n s t r u c t i o n s had been sent from P a r i s t o t h e l o c a l p o l i c e to t h a t t h e l o r r i e s were r e l e a s e d .

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The Cabinet -

Took n o t e ,

83?

THE SECRETARY OF STATE FOR NORTHERN IRELAND s a i d t h a t he had v i s i t e d

p t h e p r e v i o u s day f o r t a l k s w i t h t h e I r i s h M i n i s t e r o f J u s t i c e ,

nan. The M i n i s t e r had a t f i r s t been nervous o f b e i n g p u t under

B essure t o t a k e more e f f e c t i v e a c t i o n on the s e c u r i t y f r o n t , b u t

the* 1 atmosphere had been r e a s o n a b l y good and t h e m e e t i n g had

resufc agreement on a number o f measures t o improve c o - o p e r a t i o n

betwee o l i c e f o r c e s i n t h e I r i s h R e p u b l i c and N o r t h e r n I r e l a n d ,

includi appointment o f L i a i s o n O f f i c e r s t o t h e r e s p e c t i v e P o l i c e

Headquart T a l k s would a l s o t a k e p l a c e between o f f i c i a l s o f t h e two

Government pn p o s s i b l e ways t o s t r e n g t h e n t h e l a w on i n c i t e m e n t t o

v i o l e n c e i n o t h c o u n t r i e s . S e c u r i t y c o - o p e r a t i o n remained a p o l i t i c a l l y

s e n s i t i v e m a t t e r f o r t h e I r i s h Government, and t h e h o s t i l e r e c e p t i o n

u l a t i o n t o u n i t s o f t h e I r i s h Army and t h e Garda

g i v e n by t h e l o c a Siochana d u r i n g s e c u r i t y o p e r a t i o n s i n County L e i t r i m showed t h a t

anarchy was c l o s s u r f a c e s o u t h as w e l l as n o r t h o f t h e I r i s h

b o r d e r . I t was an n t B r i t i s h i n t e r e s t t o ensure t h a t t h e r e was no

g e n e r a l breakdown o d o r d e r t h r o u g h o u t t h e i s l a n d o f I r e l a n d and

to c o - o p e r a t e c l o s e l y I r i s h Government i n p u r s u i t o f t h a t

o b j e c t i v e . I n Northern d t e r r o r i s t murders c o n t i n u e d a t a reduced

l e v e l . He had r e c e n t l y had e f u l meeting w i t h the leaders o f t h e

O f f i c i a l U n i o n i s t P a r t y (M eaux) and t h e Democratic U n i o n i s t P a r t y

(Mr I a n P a i s l e y ) , f o l l o w i n g re had been no breach o f t h e

c o n f i d e n t i a l i t y o f the d i s c u s ^ As a r e s u l t o f t h a t m e e t i n g he had

agreed w i t h t h e General O f f i c e n d i n g i n N o r t h e r n I r e l a n d t h a t an

a t t e m p t s h o u l d be made t o c l o s e r o f c r o s s i n g p o i n t s on t h e b o r d e r

which a f f o r d e d t e r r o r i s t s easy ac and f r o m t h e I r i s h R e p u b l i c .

The Cabinet -

Took n o t e .

that, as was THE PRIME MINISTER s a i d t h a t she was propo 5. ave a general customary a t t h i s t i m e o f y e a r , t h e Cabinet sho d i s c u s s i o n o f t h e economic s i t u a t i o n and prospe ^meeting early i n F e b r u a r y , as a p r e l u d e t o t h e C h a n c e l l o r o f t h e Ex ir's preparation of h i s Budget. That meeting would have b e f o r e i t & i'andum by the T r e a s u r y c o n t a i n i n g i n f o r m a t i o n about t h e t r e n d over In the d i s t r i b u t i o n o f p u b l i c e x p e n d i t u r e between c u r r e n t and il e x p e n d i t u r e , as had been r e q u e s t e d i n e a r l i e r d i s c u s s i v

The Cabinet -

Took n o t e .

Cabinet

Office

12 January 1984

CONFIDENTIAL